Or, consider other cards for 50,000 or more miles or points that transfer into United miles with additional flexibility for your everyday spending.
$750 for air / hotel / car bookings. Or transfer points to United, Southwest, Hyatt, and more.
No annual fee.
Most of us want to use our miles for basic domestic trips, in fact in our recent survey of airline mile program members we found that almost 60% of people saving miles for an award trip want to use them for travel right here in the mainland U.S.
But talk to experts, and many will scoff at the notion of ‘wasting’ miles earned via credit card spending on award trips in the United States, and think you’re better off earning cash back rewards if that’s the case. It’s convincing enough to make you feel guilty about using your miles to take flights close to home.
Yet there are several reasons that using a credit card to earn points and miles for domestic awards can give you greater value than a good cash back card, some based on real numerical value, and some more personal.
Most experts like to assign a dollar value per mile to assess whether using points for a trip is a ‘good deal.’
Usually it works like this…
If a ticket costs $300 in cash but is available for 25,000 miles then your miles earned you 1.2 cents each in travel savings. And if you’re earning 1 mile per dollar on a credit card that’s about 1.2% cash value on your spending.
A more expensive reward like an international business class ticket could cost you 125,000 miles but cost $4,000 in cash, or 3.2 cents each in travel savings.
That makes a domestic award look like a bad deal, especially since it’s easy to earn 1.5% cash back on a good cash back card, and leads some people to swear by only using their miles for big international trips.
But there are other ways to think about it that make earning miles toward domestic awards with a credit card a very good deal:
1. You have some miles to top off
2. You take advantage of introductory bonus offers
3. You leverage lucrative reward options
Let’s say you have 15,000 United miles sitting in your account thanks to some flights you have taken over the years. And the award you want for that domestic flight will cost 25,000 miles, or $300 if you spent in cash.
So you need 10,000 more United miles to earn your reward. And getting those 10,000 miles will save you $300. You can do that if you use a card that earns United miles.
In that case, the miles you earn will save you 3 cents each.
If you instead spent on a cash back card you’d need to spend enough to get all $300 as cash back to earn the same value to you since you can’t take advantage of the United miles you’ve already earned. That could mean spending $20,000 – $30,000 to earn $300 cash back versus spending $10,000 at most on a card that earns United miles to get to the same savings on a ticket.
So if you have miles sitting in an account, but not yet quite enough for an award, think about getting a card that earns those miles rather than putting all your spending on a cash back card.
You’ll get great value topping up those ‘free’ miles you have already earned from flying and other places first, then using them up before starting fresh.
You can quickly earn 30,000 – 50,000 miles, enough for a basic domestic award, by applying for credit card bonuses. These bonuses typically require only about $3,000 in spending to achieve, so for $3,000 in spending you’re getting a ticket that could be valued at $300 or more.
That’s like 10% reward value for your spending. A very good deal compared to the 1-2% reward value you’d typically get from a cash back card, and in fact this is the very best way to earn the most rewards from what you’re already spending.
And there are lots of bonus offers floating around.
So every year you could get at least one or two offers for 30,000 – 50,000 points each, enough for just about any domestic ticket – not just those marked at the cheap ‘saver’ level with lots of restrictions. In fact, you shouldn’t get hung up on only booking Saver level awards when it’s so easy to earn enough miles for almost any domestic award with just one credit card sign on bonus.
What’s not to like about an easy to redeem free ticket from a few months’ worth of your usual credit card spending?
It’s an award you can use immediately. And if you don’t like a card you can always decide to cancel it. Annual fees for many offers aren’t due until a year after you sign up.
One of the best deals in U.S. award travel actually comes from the British Airways frequent flier program. If you live in an American Airlines, Alaska Airlines, or US Airways hub Avios can save you a lot of money without a lot of hassle.
That’s because Avios charges less than any other program for short flights, and you can use them on its OneWorld partners like American Airlines, soon US Airways, as well as its non-OneWorld partner Alaska Airlines here in the United States.
As long as you’re on a non-stop flight you’ll pay the same or fewer miles than if you used American, Alaska, or US Airways’ own miles for most trips:
A $300 ticket for 9,000 miles is an incredible value.
Even longer trips can be a good deal. The West Coast to Hawaii is less than 3,000 miles in distance so you can fly Alaska or American’s flights for just 25,000 miles versus 45,000 miles or more in their own programs, a great deal if you can find the availability, and a savings of $700 or more per ticket on many days.
You can earn Avios via the British Airways Visa, as well as cards that earn Chase Ultimate Rewards, so they are very easy to earn.
Another option is leveraging the Southwest Companion Pass
This is harder to get, but an incredible travel deal if you can swing it. Basically, if you can earn 110,000 Southwest qualifying points in one calendar year you can get a pass that lets you bring someone free along on all of your Southwest flights for the rest of the year, and all of next year.
There are no hidden catches to it. You just buy one ticket in cash or points, then your companion’s ticket is covered on as many trips as you want. You just pay some modest taxes on the companion ticket.
The bonuses from Southwest credit cards count toward earning Companion Pass, and they can sometimes be 50,000 points. There are four cards that earn Southwest points that count toward Companion Pass, so just a couple of those and you’re very close to earning Companion Pass without being a Southwest frequent flier. Plus, all of the points you earn can be used toward flights – thousands of dollars worth. You could get $3,000 or more in travel savings if you use the offer well.
If you can earn 50,000 – 100,000 miles a year from your card spending, which most of us can with a couple of offers a year, would you rather take 2-4 domestic trips in coach, or save for just one long international trip?
Sure, the cash cost of that international trip might be more than 2-4 domestic trips. But what do you prefer?
That’s the most important question to ask. An award you enjoy is the most valuable of all, and points and miles for travel are the best way to earn one.
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